EPB will approach Chattanooga city government in the next few weeks with a franchise agreement for cable service, President and CEO Harold DePriest said.

“We could have gone the route of other providers, with a statewide franchising agreement,” Mr. DePriest said in a statement. “But we are a local company, looking out for the interests of our customers and community. And to us, that means negotiating individually with the different towns and municipalities.”

The utility’s board of directors Friday authorized its managers to negotiate with local governments for franchise agreements. Chattanooga will be the first city approached for an agreement, Mr. DePriest said.

EPB next week will start receiving $13 million in electronic control equipment, including 14 satellite dishes, to run the residential cable, Internet and telephone system, said Katie Espeseth, telecom vice president. The utility will start installing the head-end equipment in a couple of weeks at a facility at Oak Street and Greenwood Avenue, she said.

The utility is a couple of weeks behind its original schedule to install the control equipment, Ms. Espeseth said. In August EPB agreed to a $66.9 million contract with Alcatel-Lucent of France to buy head-end control equipment, telephone switches, satellite dishes and set-top boxes for customer homes.

EPB had been negotiating with Motorola, but the talks fell apart when the company insisted on signing off on any updates that the utility made to the network, officials said previously. EPB would have had to obtain a license for any changes to its network. That cost a couple of weeks, Ms. Espeseth said, but the utility is making progress again.

EPB workers have renovated an underground site at Oak and Greenwood, where the control equipment will be housed, and soon will start renovating offices for telecom workers, Ms. Espeseth said.

Earlier this week EPB announced that downtown and surrounding neighborhoods of Chattanooga, plus Red Bank and East Ridge, would be the first areas to receive residential telecom service. A test program will start in late January or early February, officials said.

Also, EPB has finished testing a new $2 million billing system for EPB’s existing commercial telecom business, Ms. Espeseth said. The system, which is more efficient than the old system, will be used to generate bills for residential telecom clients, she said.

David Wade, vice president of the electric system, said that in the next few weeks EPB will be ready to select the vendor to supply the smart meters that will be used in the telecom system. The utility will begin installing the meters at the same time it runs fiber to homes for the telecom service, he said.

The smart meters also will be used next year to start a new pilot program to conserve electricity, Mr. Wade said. EPB has just finished one pilot program, called Energy Sense, and personnel are analyzing that data, he said.

Smart meters will allow EPB to bill customers at different rates based on what times of day they use power, Mr. Wade said. Some times of the day are more expensive than others to supply power. Smart meters also will allow customers to control their thermostats via the Internet, he said, as well as providing other conservation options.